Case 3:13-cv BR Document 1 Filed 03/07/13 Page 1 of 8 Page ID#: 1

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1 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 1 of 8 Page ID#: 1 Elizabeth Tedesco Milesnick, OSB No elizabeth.milesnick@millemash.com 3400 U.S. Bancorp Tower Ill S.W. Fifth Avenue Portland, Oregon Telephone: (503) Facsimile: (503) Attorneys for Defendant UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION CRAVE BAKE SHOP, LLC, CVNo. v. CRAVE,LLC, Plaintiff, Defendant. COMPLAINT FOR DECLARATORY JUDGMENT OF NON-INFRINGEMENT OF TRADEMARK RIGHTS Crave Bake Shop, LLC ("Bake Shop") states and pleads as follows:. NATURE OF ACTION 1. This is an action for declaration of rights under the Lanham Act, 15 U.S.C et seq. Bake Shop seeks a declaration from this Court that the use of Bake Shop's Page 1 -

2 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 2 of 8 Page ID#: 2 federally registered trademark CRAVE BAKE SHOP for pastry and dessert shops does not infringe, dilute, or otherwise violate the rights of defendant Crave, LLC ("CLLC''). Alternatively, Bake Shop asks for a declaration that CLLC is estopped from asserting trademark infringement and related~ claims against Bake Shop. PARTIES 2. Bake Shop is an Oregon limited liability company with its principal place of business at 460 Fifth Street, Lake Oswego;Oregon CLLC is a California limited liability company with its principal place of business at 368 Richland Avenue, San Francisco, California JURISDICTION AND VENUE 4. This Court has jurisdiction of this civil action under the Declaratory Judgments Act, 28 U.S.C and 2201, and thelanham Act, 15 U.S.C. 1125(a) and, (c). 5. Venue is proper in this Court under 28 U.S.C because CLLC sells goods in this district, and has contacted and sent the correspondence that created the present dispute to Bake Shop in this district, with a substantial part of the events or omissions giving rise to the claim to be adjudicated in this action occurring in this district. CLAIM FOR RELIEF (Declaratory Judgment of Non-Infringement) 6. Since 2009, Bake Shop has been baking and selling gluten-free artisancrafted cakes, cupcakes, cookies, cinnamon rolls, and other pastries using the trademark CRAVE BAKE SHOP. Bake Shop has enjoyed substantial success and acclaim, appearing on the Food Network's national television show "Cupcake Wars" in 2010, 2011, and 2012, winning the Page U.S. BANCORP TOWER

3 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 3 of 8 Page ID#: 3 competitions in December 2011 and May 2012, and named runner-up in the "Cupcake Champions" final in June On March 3, 2011, Bake Shop filed an application with the United States Patent and Trademark Office ("PTO") to register the CRAVE BAKE SHOP trademark for pastry and dessert shops. 8. On May 31, 2011, Bake Shop received a letter from CLLC stating that Bake Shop's use of the CRAVE BAKE SHOP trademark "has caused and will continue to cause confusion in the market and as such constitutes willful trademark infringement, dilution of the Crave tradename, and false designation of origin." CLLC cited its CRAVE A SAN J FRANCISCO BAKERY design mark with Registration No , pictured below: 9. CLLC demanded that Bake Shop confirm in writing within 10 days that it would cease and desist its use of the CRAVE BAKE SHOP name, and stated, "Should Crave Bake Shop fail to so confirm, [CLLC] may file a lawsuit in the United States District Court in the Northern District of California for Crave Bake Shop's willful violation of the Lanham Act and relevant state unfair competition law whereby Crave will seek all legal damages to which it is entitled, including, but not limited [sic] statutory damages for each violation, lost profits, treble damages, punitive damages, injunctive relief along with its attorneys' fees and costs incurred in bringing such an action." Page U.S. BANCORP TOWER Ill S. W. FIFTH AVENUE

4 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 4 of 8 Page ID#: In June 2011, Bake Shop and CLLC corresponded with additional information about their businesses. 11. On July 1, 2011, the PTO sent an Office Action to Bake Shop on its application to register CRAVE BAKE SHOP affirming that "[t]he Office records have been searched and there are no similar registered or pending marks that would bar registration under Trademark Act Section 2(d), 15 U.S.C. 1052(d) [regarding likelihood of confusion]." 12. On July 13, 2011, Bake Shop responded to CLLC that, as the PTO had recently confirmed, there is no likelihood of confusion between Bake Shop's CRAVE BAKE SHOP mark and CLLC's CRAVE A SAN FRANCISCO BAKERY design mark. Bake Shop I pointed to the differences between the two marks and the companies' logos and to the many coexisting uses of the word "crave" in the food industry, and proposed terms on which the parties could coexist in the market. 13. On S_eptember 6, 2011, CLLC reasserted its belief that Bake Shop was infringing its trademark, and warned that if Bake Shop did not comply with CLLC's demands, Bake Shop "will leave [CLLC] no choice but to file a la'ysuit and seek a judicial determination ofthe rights ofthe parties, damages, and injunction against [Bake Shop's] use ofthe mark." The letter concluded that Bake Shop's use of the mark was "grossly improper, misleading, and warrants prompt judicial intervention if left unabated." 14. On October 5, 2011, Bake Shop responded by addressing some ofthe substantive contentions in CLLC's September 6, 2011 letter and reiterating its belief that the parties could coexist. Page 4- Ill S. W. FIFTH AVENUE

5 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 5 of 8 Page ID#: Bake Shop did not hear from CLLC for more than one year and assumed that CLLC had agreed with the position stated in Bake Shop's October 5, 2011 letter that the parties could coexist without confusion. Bake Shop proceeded to build up its pastry and dessert business, expanding its distribution and product offerings, including dry baking mixes, and working to publish a cookbook. 16. Also during the period of silence from CLLC, on July 11, 2012, the PTO published the CRAVE BAKE SHOP mark in the Official Gazette "for the purpose of opposition by any person who believes he will be damages by the registration of the mark." CLLC did not oppose the mark atthe PTO. By allowing Bake Shop's CRAVE BAKE SHOP mark to register without opposition, CLLC further confirmed Bake Shop's belief that CLLC agreed the parties could coexist without confusion. 17. On October 16,2012, the PTO registered Bake Shop's CRAVE BAKE SHOP mark, giving it Registration No The registration certificate is attached hereto as "Exhibit A." 18. On December 24, 2012, Bake Shop was surprised to receive another demand letter from CLLC, demanding that Bake Shop buy a license for its continued use of CRAVE BAKE SHOP. 19. On February 18, 2013, Bake Shop responded by noting its surprise and stating, "After more than a year of silence, we had assumed this matter was resolved." Bake Shop reasserted its belief that there was no infringement and pointed out that the CRAVE BAKE SHOP mark had since federally registered. It further informed CLLC, however, that due to changes in Bake Shop's business, Bake Shop would be phasing out its use ofthecra VE BAKE ~\ Page 5- TELEPHONE: (503) 2H-5858

6 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 6 of 8 Page ID#: 6 SHOP mark over the next year or so. Bake Shop's letter stated, "We trust this resolves CLLC's concerns." 20. On February 27, 2013, CLLC sent B.ake Shop a letter purportedly constituting CLLC's "final attempt to resolve this matter amicably." The letter asserts that Bake Shop's claim to be phasing out its mark was "a subterfuge to simply delay the filing of suit here." Even if Bake Shop does phase out the use of mark, CLLC stated, "that does not excuse past ' infringement or the damages it has caused and to which Crave would be entitled." The letter, threatens that if Bake Shop does not enter into settlement discussions on CLLC's terms, Bake Shop "is leaving [CLLC] little choice, but to proceed with this matter." 21. CLLC's repeated threats have created a reasonable app;rehension of litigation and have brought into question Bake Shop's right to phase out use of its CRAVE BAKE SHOP mark on its owntimeline and without liability for past damages to CLLC. 22. Bake Shop's use of its CRAVE BAKE SHOP mark does not constitute ' trademark infringement, dilution, or false designation of origin under the Lanham Act (Lanham Act 15 U.S.C. 1125) or at common law with respect to the CRAVE A SAN FRANCISCO BAKERY design mark. I 23. An actual and justiciable controversy exists between the parties based on CLLC's claims and demands. Bake Shop wishes to resolve any controversy and determine that it has not and will not, by continued use of the CRAVE BAKE SHOP mark; infringe, dilute, or "otherwise violate the rights ofcllc in its CRAVE A SAN FRANCISCO BAKERY design mark. Page 6 - Ill S. W. FIFTH AVENUE

7 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 7 of 8 Page ID#: Bake Shop is entitled to a declaration and judgment that Bake Shop's use of its CRAVE BAKE SHOP mark does not constitute trademark infringement, dilution, or false designation of origin under the Lanham Act (Lanham Act 15 U.S. C. 1125) or at common law with respect to the CRAVE A SAN FRANCISCO BAKERY design mark. 25. Alternatively, Bake Shop is entitled to a declaration that CLLC is estopped from asserting its trademark infringement and related claims because CLLC's silence after receiving Bake Shop's October 5, 2011letter, and failure to oppose the CRAVE BAKE SHOP mark when it was published for opposition by the PTO, misled Bake Shop to act to its detriment by undertaking efforts to expand its business as described inparagraph 15 of this complaint. PRAYER FOR RELIEF WHEREFORE, Bake Shop respectfully requests that the Court enter judgment against CLLC as follows: A. Declaring that Bake Shop's use of its federally registered CRAVE BAKE SHOP mark does not infringe, dilute, or otherwise violate the trademark rights claimed by CLLC; B. Declaring that CLLC is estopped from asserting that Bake Shop has infringed, Page 7- TELEPHONE: (503)

8 Case 3:13-cv BR Document 1 Filed 03/07/13 Page 8 of 8 Page ID#: 8 diluted, or otherwise violated the trademark rights claimed by CLLC; and C. Awarding such further and other relief as the Court deems just and proper. DATED this 7th day of March, Is/ Elizabeth Tedesco Milesnick Elizabeth Tedesco Milesnick OSB No elizabeth.milesnick@millemash.com Phone: (503) Fax: (503) Page U.S. BANCORP TOWER